Agenda - 04-15-2003-5f - Laserfiche WebLink

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t ~ OF j{tA ~'" ~ d -- - CP~~ March 31, 2003 Mr. John M. Link, Jr. Orange County Manager PO Box 8181 Hillsboro, NC 27278 Dear Mr. Link: APR - 7 2003 Please find enclosed Senate Bi11277 as sponsored by Senator Tony Rand and others. This bill, if passed, will exempt property that is held by anon-profit entity in trust for a public or private university from local ad valorum taxation. Watauga County stands strongly opposed to this bill and you and your Council or Board may be as well. In Watauga County, Appalachian State University has created a foundation that entered into a partnership with a private corporation to develop a large apartment complex that is held in trust by the foundation to be turned over to the University after a period of 25 to 30 years. This arrangement allows the developer to use tax free bonds for financing as well as to claim a return on his investment in the years of operation prior to turning the property over to the University. This places an undue burden on the counties and cities in removing valuable property from the tax base and at the same time increasing the demand for locally funded services. The complex in Watauga County is located approximately 2 miles from campus and it is my understanding that the developer of this project has others, planned or completed, in other college counties and towns. Watauga County currently has denied the application for exemption for this particular piece of property. The Property Tax Commission has agreed with Watauga County. It is anticipated that the University will appeal to the Court of Appeals and possibly to the Supreme Court depending on the outcome. Watauga County's concern goes beyond this single project. If Senate Bill 277 is passed by both the House and Senate, nothing would prevent a university from building new or purchasing pre-existing apartment complexes to house their students thereby taking valuable property off of the tax base. This creates an unfair advantage in the apartment rental market and if the practice becomes widespread it may further erode local tax bases. An additional concern of the rental proprietary property market is the provision in the bill that would allow for public use of these facilities so long as there is no "material amount of business or patronage with the general public". In closing, I appreciate you sharing this information with your Board or Council and would ask that if they share Watauga County's concern that they communicate their reservations to their representatives. It appears that this bill may pass in the Senate leaving the best avenue for defeat in the House of Representatives. Thank you for your time and your strong consideration of this request. Sincerely, /~~~ Robert E. Nelson, Jr. County Manger RENjr/ajf WATAUGA COUNTY COUNTY MANAGER Courthouse, Suite 1- 842 West King Street -Boone, NC 28607 - (828) 265-8000 TDD 1-800-735-2962 -Voice 1-800-735-8262 -FAX (828) 264-3230 Enclosure